TMI Blog2012 (5) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... "the Tribunal") in the case of Cray Research India Ltd. The appeals pertain to the assessment years 1990-91, 1991-92 and 1992-93. 2. The short question raised by the Revenue in the present appeals is whether the Tribunal was right in setting aside the reassessment proceed- ings on the ground that the jurisdictional pre-conditions mentioned in sec- tion 147 are not satisfied. The Tribunal in the impugned order has held that there was no failure or omission on the part of the respondent-assessee to disclose fully and truly all material facts. 3. Learned counsel for the Revenue has submitted that the order of the Tribunal requires interference as it has been wrongly observed that the assessee had made full and true disclosure of the material facts. In this connection, he submits that the agreement entered into between the respondent-assessee and the Department of Science and Technology, Government of India, was not filed before the Assessing Officer in the assessment proceedings for the assessment years 1990-91 and 1991-92. He submits that this is apparent if we read the letter dated November 9, 1994, filed by the respondent-assessee during the course of the assessment pro- ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (-) 251,62,415 Deduct : Entertainment expenses under section 37 (2A) 45,072 Legal and professional fee 4,36,727 In excess of limits under section 40A(12) Disallowance under rule 6D 20,000 Payments to club as per the tax audit report 69,267 5,71,066 Total Loss : (-) 245,91,349 Assessment year 1991-92 "The assessee-company continues to derive income from mainte- nance service charges from the Department of Science and Techno- logy. During the year under consideration, the assessee has shown total receipts from maintenance service charges at Rs. 91,59,156. Necessary details have been furnished and placed on record. After discussion total loss is computed as under : (Rs.) (Rs.) Net loss as per the profit and loss account (-) 148,93,690 Deduct : Disallowance under section 37(2A) 42,897 Legal and professional fee in excess of Rs. 10,000 as per the tax audit report 2,66,909 Disallowance un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the assessment years 1990-91 and 1991-92 also, we are not inclined to accept the submissions made by the Revenue for the reasons stated below : (i) Reasons to believe mentioned above do not record that a copy of the agreement was not on record and, therefore, there was failure or omis- sion on the part of the respondent-assessee to make full and true disclo- sure of material facts. The case now made out by the Revenue is different from the grounds mentioned and recorded in the reasons to believe. (ii) The only activity undertaken by the respondent-assessee in India related to maintenance and service of a super computer, which was sold by the respondent-assessee to the Government of India. The respondent- assessee had received service charges and maintenance charges in respect of the same and had incurred expenditure. This being the only activity, which was undertaken by the respondent-assessee in India, it is difficult to perceive and accept the contention of the Revenue that the nature and character of the maintenance and service charges paid and payments received was not within the knowledge of the Assessing Officer and gone into. (iii) The assessment orders for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts necessary for his assessment for that year'. It postulates a duty on every assessee to disclose fully and truly all material facts necessary for his assessment. What facts are material, and necessary for assessment will differ from case to case. In every assessment proceeding, the assessing authority will, for the purpose of computing or determining the proper tax due from an assessee, require to know all the facts which help him in coming to the correct conclusion. From the primary facts in his pos- session, whether on disclosure by the assessee, or discovered by him on the basis of the facts disclosed, or otherwise-the assessing autho- rity has to draw inferences as regards certain other facts ; and ulti- mately, from the primary facts and the further facts inferred from them, the authority has to draw the proper legal inferences, and ascertain on a correct interpretation of the taxing enactment, the proper tax leviable. Thus, when a question arises whether certain income received by an assessee is capital receipt, or revenue receipt, the assessing authority has to find out what primary facts have been proved, what other facts can be inferred from them, and taking all thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... often differ as regards what inferences should be drawn from given facts, it will be meaningless to demand that the assessee must disclose what infer- ences-whether of facts or law-he would draw from the primary facts." (See also Atma Ram Properties P. Ltd. v. Deputy CIT Income-tax Appeals Nos. 52 and 87 of 2010, decided on November 11, 2011-since reported in [2012] 343 ITR 141 (Delhi), CIT v. Purolator India Ltd. Income-tax Appeal No. 489 of 2011, decided on November 28, 2011 (since reported in [2012] 343 ITR 155 (Delhi) and W. P. (C) 6884 of 2010 titled BLB Limited v. Asst. CIT decided on December 1, 2011 (since reported in [2012] 343 ITR 129 (Delhi). (vi) In the assessment order relating to the assessment year 1995-96, the Assessing Officer for the first time after examining the legal provisions had observed that the payments received from the Department of Science and Technology, Government of India were "fees for technical services" and, therefore, should be taxed accordingly and not as business income. In the assessment order it is not mentioned or recorded that any new fact or factual aspect was ascertained or found on examination of the agreement. The agreement was ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
